Bitcoin continues its bullish momentum from its recent low of $11,125 on August 11 and is currently trading near the $11,600 level.
On Monday, August 11, gold and silver showed some corrective movements, and the same was seen in the cryptocurrency market, where Bitcoin fell by $700 from $11,800 to $11,125 in one day, indicating a short-term correction.
Analytical data showed that the correlation of Bitcoin with gold reached an all-time high, and the data indicated that the correlation provided support for what is said about the currency as a “store of value” and a suitable alternative to the traditional currency prone to inflation, as it showed it as digital gold.
Despite the positive sentiment towards Bitcoin as a store of value asset, gold can interfere with its price, and the price of the coin fell by 5% on Monday in a move close to the price of gold which has seen a decline in value.
Bitcoin is falling from the level 12000 dollar
Given the current recovery of the currency, it seems that the bullish momentum still dominates the crypto markets, if Bitcoin wants to maintain the bullish market, the critical support is between 11100-11300 dollars, and once it loses this level, expectations indicate that the price will record a significant decline towards the 10000$ area.
The world's largest cryptocurrency rejected the $12,000 resistance level for the second time in the past 10 days, however, traders are generally optimistic about the short-term trend for it, as when the asset remains relatively stable near a major resistance area it is usually a sign that the uptrend may continue.
The price correlation between bitcoin and gold is a topic that has sparked controversy among analysts during the past period, during the month of July the price movement between the two followed new highs, and therefore it is not surprising that the currency is now correcting along with gold and silver.
Optimism about the future of Bitcoin as an alternative currency
MicroStrategy, the world's largest public trade intelligence company, announced this week that it is giving up fiat currency and creating a primary treasury reserve using bitcoin.
The company's CEO, Michael Saylor, believes that the Corona virus pandemic and the stimulus measures enacted to combat it will lead to a significant decrease in the real long-term value of fiat currencies and many other types of traditional assets.
Saylor explained that Bitcoin is a reliable store of value and an attractive investment asset with more long-term appreciation potential than holding cash.
Cryptocurrency market recovery
In recent weeks, the cryptocurrency market has witnessed a significant increase in the demand for assets with small and medium market capitalization, with altcoins outperforming bitcoin significantly since the beginning of August.
In the medium to long term, strong performance from altcoins could spur Bitcoin higher, past price cycles show that a big rally in altcoins is followed by a rally in profit taking as returns stream into Bitcoin and Ethereum.
The total cryptocurrency market capitalization is now around $354.2 billion, and the Bitcoin Dominance Index recorded a reading of 60.5%, the lowest value since the price peaked in June 2019.